Tuesday, February 6, 2018

The real cost of tax avoidance

The corporate glory hole

Whatever the Vancouver-based mining company Turquoise Hill Resources is paying its tax lawyers, it isn’t enough.

Over the past seven years the company has used a complicated network of subsidiaries, foreign tax havens, and a variety of financial manoeuvres to avoid paying more than half a billion dollars in Canadian tax. It’s also avoided paying another $232 million (U.S.) to the government of Mongolia, where it operates one of the world’s biggest copper mines.

All this is detailed in a report by the Centre for Research on Multinational Corporations, a Dutch non-profit known as SOMO, and highlighted this past week in the Star by reporter Marco Chown Oved.

Why care about a mine in distant Mongolia or the tax dealings of a company most Canadians have never heard of?

The simple reason is that the case of Turquoise Hill provides a classic example of how so many corporations operating internationally have used tax laws, international treaties and legal structures to minimize the tax they pay.

In doing so, they are depriving governments of many billions of dollars a year in tax revenue — money that could be going to pay for everything from health care to national defence. The approach of tax season serves as a pointed reminder that we all end up paying more when others find a way to pay less. (more...)